Do I need to pay capital gains tax when I sell my home in Wichita Falls?

You may owe capital gains tax if your profits exceed the IRS exclusion limits, but many Wichita Falls homeowners qualify for exemptions. Work with a qualified real estate agent and tax professional to review your situation.

Understanding Capital Gains Tax When Selling a Home

Before we get started, let me preface this by encouraging you to seek a qualified tax or legal professional such as a CPA or tax attorney to determine the tax strategies which make sense. This article is not providing specific tax or legal advice.

Selling a home can bring a mix of excitement and financial complexity. One common concern for homeowners in Wichita Falls is whether they’ll owe capital gains tax when they sell. This guide breaks down what capital gains tax is, when it applies, and how it impacts homeowners in North Texas. By working with a trusted local real estate expert like Tim Lockhart REALTOR®, you can understand your options and maximize your returns.

What Is Capital Gains Tax?

Capital gains tax is a tax on the profit made from selling an asset, such as real estate. If your home increased in value over time and you sell it for more than you paid, you might owe taxes on that gain.

Who Has to Pay Capital Gains Tax on a Home Sale?

The IRS allows many homeowners to exclude up to $250,000 (or $500,000 if married filing jointly) of gain from the sale of a primary residence, if specific ownership and use requirements are met. See IRS Topic #701, sale of your home.

Key Exemption Rules to Know

To qualify for the exclusion, you must have:
– Owned the home for at least 2 of the last 5 years
– Lived in it as your primary residence for at least 2 of the last 5 years
– Not claimed another exclusion in the past 2 years

See IRS Sale of residence – Real estate tax tips

What If I Don’t Qualify for the Exemption?

If you don’t meet the requirements, you may have to pay capital gains tax on the full profit. The rate can vary depending on your income and how long you owned the property. See 26 USC 121: Exclusion of gain from sale of principal residence

Wichita Falls-Specific Considerations

Home values in Wichita Falls have steadily risen in recent years. While this is great news for equity, it may mean some homeowners are approaching or exceeding the IRS exemption thresholds—especially if you’ve owned your home a long time. Tim Lockhart REALTOR® can help estimate your potential gains and advise you on next steps.

How Tim Lockhart REALTOR® Can Help

As a trusted real estate expert in Wichita Falls, Tim Lockhart REALTOR® brings local insight and proven strategies to your home sale. He’ll help you price your home accurately, prepare it for sale, and connect you with professionals who can guide you on tax implications.

Final Thoughts and Next Steps

Every situation is different. If you’re thinking about selling your home in Wichita Falls and are unsure about capital gains tax, it’s important to work with both a real estate agent and a tax professional. Tim Lockhart REALTOR® is here to help you navigate your options and protect your financial outcome.

Contact Tim Lockhart REALTOR® Today

Thinking about selling your home in Wichita Falls, TX? Call or email Tim Lockhart REALTOR® today for expert guidance, local insight, and personalized support every step of the way.